What factors into the cost of solar panels?

Many factors go into deciding whether or not solar panels are right for you. Solar energy isn't free, you know. Sunlight is, but the electricity that a photovoltaic (PV) system generates is not. Where you live is going to be very relevant to your decision. The sunnier the area you live in, the more electricity a PV system can generate and the more worthwhile it would be for you to use one on your house. You'll also have to factor in how much you spend on electricity, which also depends on the utility rates in your area. If your rates are high, this will add to the value of having a solar panel system.

Of course, you're going to have to shell out some money initially to install a PVC system. In 2009 installing a solar panel setup for a home cost about $8 to $10 per watt [source: National Renewable Energy Laboratory]. The larger a system you need, the more it's going to cost per watt. And keep in mind that you probably won't be able to cover 100 percent of your electricity load with solar power, so you're still going to have a power bill even if some of your electricity is generated by the sun.

Utility company rebates, tax incentives and other programs may help defray the cost of a solar panel system; plus having a PV system can add thousands of dollars to your home's value. As technology improves, costs continue to go down, and once PV manufacturing starts to be done on a larger scale, they'll go down even more. The world is becoming more aware of how important it is to conserve power. As demand goes up, mass manufacturing becomes more possible and prices continue to fall, so the future of photovoltaics looks promising.